AxoGen(AXGN) - 2025 Q2 - Quarterly Results

Executive Summary Axogen, Inc. reported strong second quarter 2025 financial results, with significant revenue growth and a shift to net income. The company raised its full-year revenue guidance to at least 17% growth, or $219 million, reflecting confidence in its market development strategies and commercial execution - Axogen reported strong Q2 2025 results, with revenue growth and a Shift to profit, and raised full-year revenue guidance to at least 17% growth or $219 million[1][3] Second Quarter 2025 Financial Results Axogen achieved robust financial performance in Q2 2025, marked by double-digit revenue growth, improved gross margin, and a return to net income compared to a net loss in the prior year. Adjusted financial metrics also showed significant improvement Key Financial Metrics In Q2 2025, Axogen's revenue increased by 18.3% year-over-year to $56.7 million, with gross margin improving to 74.2%. The company reported a net income of $0.6 million ($0.01 per share) and adjusted net income of $5.7 million ($0.12 per share), a substantial improvement from a net loss in Q2 2024. Adjusted EBITDA also grew significantly to $9.3 million Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change (YoY) | Q1 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Revenue | $56.7M | $47.9M | +18.3% | N/A | +16.7% (vs Q1 2025) | | Gross Margin | 74.2% | 73.8% | +0.4 pp | 71.9% | +2.3 pp | | Net Income (Loss) | $0.6M | ($1.9M) | Shift to profit | N/A | N/A | | Net Income (Loss) per share | $0.01 | ($0.04) | Shift to profit | N/A | N/A | | Adjusted Net Income | $5.7M | $2.0M | +185% | N/A | N/A | | Adjusted Net Income per share | $0.12 | $0.05 | +140% | N/A | N/A | | Adjusted EBITDA | $9.3M | $5.6M | +66.1% | N/A | N/A | - Cash and cash equivalents, restricted cash, and investments increased $7.8 million during the second quarter of 2025, reaching $35.9 million at June 30, 2025, compared to $39.5 million at December 31, 2024[5] Business Highlights Axogen's Q2 2025 business highlights include broad-based revenue growth across all key markets and significant progress in expanding coverage and reimbursement for nerve repair solutions. The company also advanced its Biologics License Application (BLA) for Avance® Nerve Graft, completing critical regulatory milestones Market Development and Commercial Execution Axogen achieved double-digit revenue growth across all its markets, including Extremities, Oral Maxillofacial & Head and Neck, and Breast. The company also expanded coverage and reimbursement for nerve repair, adding an estimated 10 million new covered lives in 2025, bringing the total to approximately 17 million new lives and over 55% commercial payer coverage - Second quarter 2025 revenue growth was broad-based, with double-digit growth from Q2 2024 in all markets: Extremities, Oral Maxillofacial & Head and Neck, and Breast[6] - Expanded coverage and reimbursement for nerve repair by an estimated 10 million new covered lives in 2025, totaling approximately 17 million new lives and bringing commercial payer coverage to more than 55%[6] Regulatory Milestones The FDA accepted Axogen's Biologics License Application (BLA) for Avance® Nerve Graft on November 1, 2024, with a Prescription Drug User Fee Act (PDUFA) goal date of September 5, 2025. During Q2 2025, Axogen completed key regulatory steps, including the late-cycle meeting with the FDA, pre-licensing inspection, and sponsor inspection under the Bioresearch Monitoring program, supporting anticipated approval - FDA accepted the BLA for Avance® Nerve Graft on November 1, 2024, with a PDUFA goal date of September 5, 2025[7] - Completed key regulatory milestones in Q2 2025 for Avance® Nerve Graft BLA, including the late-cycle meeting, pre-licensing inspection, and sponsor inspection[7] 2025 Financial Guidance Axogen has raised its full-year 2025 revenue guidance to at least 17% growth, or $219 million. The company maintains its gross margin expectation of 73% to 75%, noting a potential 1% negative impact from anticipated Avance® Nerve Graft BLA approval costs. Axogen also reiterates its expectation to be net cash flow positive for the full year - Full-year 2025 revenue guidance raised to at least 17% growth, or $219 million[8] - Gross margin for the year is expected to be in the range of 73% to 75%, with a ~1% negative impact from anticipated Avance® Nerve Graft BLA approval costs[8] - Company expects to be net cash flow positive for the full year[8] About Axogen Axogen (NASDAQ: AXGN) is a leading company dedicated to the science, development, and commercialization of technologies for peripheral nerve regeneration and repair. The company aims to restore nerve function and improve quality of life for patients with peripheral nerve injuries through innovative, clinically proven, and economically effective solutions Product Portfolio Axogen's product portfolio includes a range of solutions for peripheral nerve repair and regeneration. Key products are Avance Nerve Graft (human nerve allograft), Axoguard Nerve Connector (coaptation aid), Axoguard Nerve Protector (nerve wrap), Axoguard HA+ Nerve Protector (next-gen nerve protector), Axoguard Nerve Cap (neuroma reduction), and Avive+ Soft Tissue Matrix (tissue protection). These products are available in the US, Canada, Germany, UK, Spain, South Korea, and other countries - Axogen's product portfolio includes Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, Axoguard Nerve Cap, and Avive+ Soft Tissue Matrix[12] - Products are available in the United States, Canada, Germany, the United Kingdom, Spain, South Korea, and several other countries[12] Non-GAAP Financial Measures Axogen uses non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted Net Income/Loss, and Adjusted Net Income/Loss Per Common Share - diluted to supplement its GAAP financial statements. These measures exclude noncash stock compensation expense and other items to provide additional insights into the company's operational performance and facilitate period-to-period comparisons for management and investors - Non-GAAP measures include EBITDA, Adjusted EBITDA (excluding noncash stock compensation), and Adjusted Net Income/Loss (excluding noncash stock compensation)[14] - These non-GAAP measures are used for financial and operational decision-making, to evaluate period-to-period comparisons, and provide greater transparency for investors and analysts[15] Financial Statements This section presents Axogen's unaudited condensed consolidated financial statements, including the Balance Sheets, Statements of Operations, Reconciliation of GAAP to Non-GAAP Measures, Statements of Changes in Shareholders' Equity, and Statements of Cash Flows for the periods ended June 30, 2025, and December 31, 2024 (for balance sheet) or June 30, 2024 (for income statement and cash flow) Condensed Consolidated Balance Sheets As of June 30, 2025, Axogen's total assets increased slightly to $205.45 million from $203.73 million at December 31, 2024. Current assets rose to $103.42 million, driven by increases in investments and accounts receivable. Total liabilities decreased to $93.18 million from $99.82 million, while total shareholders' equity increased to $112.28 million from $103.91 million Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $205,453 | $203,728 | +$1,725 | | Total Current Assets | $103,419 | $99,217 | +$4,202 | | Cash and cash equivalents | $20,036 | $27,554 | -$7,518 | | Investments | $9,886 | $5,928 | +$3,958 | | Accounts receivable, net | $28,029 | $24,105 | +$3,924 | | Total Liabilities | $93,177 | $99,821 | -$6,644 | | Total Shareholders' Equity | $112,276 | $103,907 | +$8,369 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, Axogen reported revenues of $56.66 million, an 18.3% increase year-over-year. Gross profit rose to $42.02 million, and the company achieved a net income of $0.58 million, a significant improvement from a net loss of $1.92 million in Q2 2024. For the six months ended June 30, 2025, revenues were $105.22 million, and net loss decreased to $3.26 million from $8.56 million in the prior year period Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Revenues | $56,662 | $47,912 | +18.3% | $105,222 | $89,289 | +17.8% | | Gross profit | $42,018 | $35,345 | +18.9% | $76,951 | $67,964 | +13.2% | | Income (loss) from operations | $1,672 | ($428) | Shift to profit | $11 | ($4,988) | Shift to profit | | Net income (loss) | $579 | ($1,921) | Shift to profit | ($3,255) | ($8,556) | Reduced loss | | Net income (loss) per common share — diluted | $0.01 | ($0.04) | Shift to profit | ($0.07) | ($0.20) | Reduced loss | Reconciliation of GAAP to Non-GAAP Financial Measures The reconciliation shows that for Q2 2025, Adjusted EBITDA was $9.26 million, up from $5.62 million in Q2 2024, and Adjusted Net Income was $5.75 million, a significant increase from $1.99 million in Q2 2024. For the six months ended June 30, 2025, Adjusted EBITDA was $12.14 million, and Adjusted Net Income was $4.82 million, compared to a loss in the prior year. These adjustments primarily account for noncash stock-based compensation expense Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :----------------------------- | :----------------------------- | :----------- | | Net income (loss) (GAAP) | $579 | ($1,921) | Shift to profit | ($3,255) | ($8,556) | Reduced loss | | EBITDA - non-GAAP | $4,091 | $1,717 | +138.3% | $4,059 | ($1,198) | Shift to profit | | Adjusted EBITDA - non-GAAP | $9,259 | $5,624 | +64.6% | $12,136 | $6,628 | +83.1% | | Adjusted net income (loss) - non-GAAP | $5,747 | $1,986 | +189.4% | $4,822 | ($730) | Shift to profit | | Adjusted net income (loss) per common share - diluted - non-GAAP | $0.12 | $0.05 | +140% | $0.10 | ($0.02) | Shift to profit | Condensed Consolidated Statements of Changes in Shareholders' Equity Axogen's total shareholders' equity increased from $103.91 million at December 31, 2024, to $112.28 million at June 30, 2025. This increase was primarily driven by stock-based compensation and proceeds from the exercise of stock options and ESPP stock purchases, partially offset by the net loss for the six-month period Condensed Consolidated Statements of Changes in Shareholders' Equity (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Shareholders' Equity | $112,276 | $103,907 | +$8,369 | | Stock-based compensation (6 months) | $8,077 | N/A | N/A | | Exercise of stock options and ESPP (6 months) | $3,547 | N/A | N/A | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash used in operating activities decreased to $5.45 million from $8.10 million in the prior year period, primarily due to a reduced net loss and higher stock-based compensation. Net cash used in investing activities increased to $5.61 million, mainly due to higher purchases of investments. Net cash provided by financing activities significantly increased to $3.54 million, driven by proceeds from stock option exercises and ESPP. Overall, there was a net decrease in cash and cash equivalents, and restricted cash of $7.52 million Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------- | :------------------------------- | :------------------------------- | :----- | | Net cash used in operating activities | ($5,449) | ($8,101) | -$2,652 (less cash used) | | Net cash used in investing activities | ($5,608) | ($4,484) | +$1,124 (more cash used) | | Net cash provided by financing activities | $3,539 | $748 | +$2,791 | | Net decrease in cash and cash equivalents, and restricted cash | ($7,518) | ($11,837) | -$4,319 (less decrease) | | Cash and cash equivalents, and restricted cash, end of period | $26,036 | $25,189 | +$847 | Additional Information This section provides important legal disclaimers regarding forward-looking statements, outlining potential risks and uncertainties that could cause actual results to differ materially from projections. It also includes details for the investor conference call and company contact information Cautionary Statements Concerning Forward-Looking Statements This section highlights that the press release contains forward-looking statements based on management's current expectations, which are subject to various risks and uncertainties. These risks include leadership transitions, supply chain issues, inflation, hospital staffing, product development timelines, regulatory processes, financial performance, and geopolitical conflicts, as detailed in the company's Form 10-K. The company assumes no responsibility to update these statements - Statements are forward-looking and subject to risks including leadership transitions, supply chain issues, inflation, hospital staffing, product development, regulatory approvals, and geopolitical conflicts[13] - Actual results may differ materially from projections, and the company assumes no responsibility to publicly update or revise any forward-looking statements[13] Conference Call & Contact Information Axogen hosted a conference call and webcast for the investment community on August 5, 2025, at 8:00 a.m. ET. Replay information is available on the company's investor relations website. Contact information for investor relations is also provided - Conference call and webcast held on August 5, 2025, at 8:00 a.m. ET, with replay available on the company's investor website[9][10] - Investor contact: InvestorRelations@axogeninc.com[16]